In what Gilt Groupe CEO Kevin Ryan says will probably be its last round of private funding, the company recently raised $138 million from Goldman Sachs and Japan's Softbank Group. This brings the valuation of the network of online sale sites that Git has grown to become to $1 billion — more than twice its valuation in April of last year when they raised a then-pittance of $35 million.
Gilt hasn't turned a profit, yet has expanded rapidly, going from putting a few designer dresses on sale to putting those dresses plus men's clothes plus trips to Mustique plus seaweed body wraps at your local spa plus Pilates classes at your local Pilates gym on sale. All those categories sometimes make the site feel a little overwhelming, like an old friend who may as well have grown an additional head after she got married and quit her job to spend her days buying her husband shoes and working on her abs.
Gilt started in the midst of the recession, which was the ideal time for getting into the business of selling the heavily discounted designer merchandise even rich people weren't buying at full price. Now they have a smaller pool of stuff to sell, as designers realize they don't have to unload things on Gilt. This hasn't seemed to slow the Gilt sales at all — though the merchandise is more routinely questionable than outright amazing as it was when the site began. Is it a problem of editing or not having enough other stuff to post?
The Wall Street Journal notes:
Investors are snapping up opportunities to invest in a fresh crop of Internet companies. Many have much more solid fundamentals than companies that took off during the last tech boom more than a decade ago, but some observers warn the gold rush is again leading to valuations that are hard to defend.
What may be harder to defend, actually, is why so many sample sale sites — Gilt Groupe, Rue La La, Haute Look — must have some sort of French inflection in their names.